Monday, January 30, 2012

Often, when I tune into my Twitter feed, I often get the impression that the world has already moved into a place where all human collaboration is done on mobile devices using social software, all software is delivered as a service, all data is Big Data and lives in the cloud. Often, I meet customers who fit into this category and I get very excited about how they push the barriers.

But then I look again and listen to customers who are different. I meet customers who still ban public social media such as Twitter and Facebook from their organization. Their only approved mobile device is an ancient model of BlackBerry with no built-in camera, and the idea of their data ever entering a cloud send shivers down their spines. While perhaps less exciting, these are often some of the largest customers I meet.

Do I suffer from a multiple personality disorder? Do I live in two parallel worlds that rarely connect?

Well, when we look at the big industry analyst firms in our space, it appears that they too have aligned themselves along these lines of demarcation. They have analysts who cover subjects such as compliance, records management, archiving, security, and e-discovery. Those analysts cannot be found on Twitter, they don’t write many blogs, and their email signature includes long disclaimers. Then, the same firms have analysts who cover collaboration, social software, web experience management, and digital asset management. These analysts are much more visible on social media and they are a little less paranoid about the fact that everything they say is a record and subject to legal discovery rules.

Yes, there are different worlds that co-exist. Sometimes, we marketers like to get ahead of ourselves. We start believing that everybody is on the leading edge. And some customers clearly are. There are many industries with low barriers to entry, comparable products, and high price pressures where it is the technology that allows companies to differentiate. Just think of the competitive pressures in manufacturing, retail or consumer packaged goods.

At the same time, there are heavily regulated industries that have developed a strong record-keeping discipline over the last few decades. Think pharmaceuticals, oil&gas, utilities, and increasingly financial services (Dodd-Frank anyone?). These customers are clearly much more conservative but that doesn’t make them any less demanding or any less attractive for a vendor. Their business requirements are simply different.

Successful vendors can operate on the entire spectrum of solutions - from those catering to the most conservative business needs all the way to those who will explore the very latest technology to get an inch of competitive advantage for the next couple of quarters. The most successful vendors can cater not only to the glamour of the one extreme or the dependability on the other end of the spectrum. They understand the business demands of the organization and can cater to all of them and to any combination in between.

Yes, there are multiple worlds out there which makes our business very exciting!

Monday, January 23, 2012

Google is changing. It was and still is one of the amazing success stories since they have built a highly profitable business based on their search service. In addition to making a boat load of money, Google attracted a lot of positive karma by providing fantastic service and by proclaiming their mantra “Don’t Be Evil”. Ten years ago, they even lived by it.But, fast forward to January 2012. Google is now a publicly traded company with the typical Wall Street pressure of quarterly earnings. Search-based advertising is still a giant money-making machine and Google keeps innovating by coming up with new ways to make advertisers part with their budgets - i.e. local search, mobile search or map based search. But an important thing has changed since - Google now has competition!Google’s mission, as stated on their Web site, is to organize the world's information and make it universally accessible and useful. That’s a noble goal that benefits mankind while allowing Google to make a ton of money along the way. But Google is not true to their mission anymore. For instance, there is a lot of information on Facebook and Twitter and Google is deliberately not searching for it. Is the information on Twitter not part of the “world’s information” that should be universally accessible and useful?A few days ago, Google escalated this game to another level when it changed its search ranking algorithm to prioritize the information found on its own social network, Google+. This prioritization has little to do with actual relevancy which is supposed to be at the heart of the search ranking algorithm. Instead, it artificially promotes Google’s own fledgling social network which represents another source of advertising revenue for Google. Information posted on Google+ ranks relatively high, often even higher than Web sites to which it points to. Information posted on Facebook and Twitter is not available at all.

Now, let’s consider advertising - Google’s primary revenue source. Advertisers who want their content to be visible in Google search will have no choice but to promote that content in Google+. As a result, Google+ will enjoy more traffic and more user interactions while fueling Google’s revenue engine. Pretty clever, actually. Well, diabolically clever if you ask me. By unjustly promoting its own content and suppressing content from its competitors, Google is double-dipping by cross-promoting two of its services. No, Google can’t claim that this is not evil.This is very evil, indeed. Google has sold out its beliefs. Instead of providing customers with the best possible experience, Google delivers the experience that maximizes its revenue. What’s next? A YouTube video will rank higher than a more relevant video on the Discovery Channel’s web site? You bet! What Google’s doing to Twitter is no different from what Microsoft did to Netscape back in the 90s. Microsoft ended up as the target of a huge anti-trust lawsuit that has had a massive impact on Microsoft’s pace of innovation. Google is marching down the same path now and nobody will like the end of it. Curiously enough, it is none other than Microsoft that provides Bing, the search engine that can stand up to Google. I’m not trying to portray Microsoft as the angel while calling Google the devil. But Bing can search information on Twitter and while it doesn’t appear to be searching Facebook today, it probably could since Microsoft has a stake in Facebook. Bing still has a relatively small market share compared to Google but that could change.Because now, Google is evil.

Monday, January 16, 2012

I’ve wanted to write this post for a while, but I was worried that you would read too much into it if it was published shortly after any particular acquisition by my employer, OpenText. Obviously, we know a thing or two about acquisitions at OpenText. They are an important part of our growth strategy. But this post is not about any particular acquisition or about OpenText per se, it is about the general reasons why companies buy other companies.High-tech acquisitions tend to draw a lot of attention when they are announced and most of the coverage is focused on the perceived strategic fit. Or, what the technology pundits consider to be the strategic fit. Unfortunately, most of the time, everybody focuses on the technology and nothing else. Sure, the technical strategy is pretty fundamental for a technology company. Yet in reality, there are many possible reasons for high-tech companies to acquire:1. TechnologyThis is what most people think of first and a technology driven acquisition is usually driven by vendor’s “build, buy, or partner” analysis - one of these strategies is the most economical given the cost, time to market, and account control. 2. Access to new marketsAn acquisition can give the suitor quick access to new markets for the purposes of growth or diversification - for example to new geographies, new channels, new partners, new vertical markets, or access to exclusive government contracts. Buying a vendor who’s established itself in a given market can be an effective way to get there fast or cost-effectively.3. Customer baseBuying a customer base can be extremely lucrative in the enterprise software market. Customers typically pay around 20% of the original license cost annually for maintenance - for support and upgrades. Given how sticky enterprise software can be, this is often a highly profitable business for many years to come.4. TalentYou want to off-shore your development or quickly build a sales force specialized in a new vertical market? Buying a company with that kind of talent may be a quick way of getting there. Just make sure you keep them.5. AssetsAcquiring a company can be an effective way to get their assets, i.e. a patent portfolio, production facilities or data centers.6. Outflank competitionSometimes, buying a company makes sure a competitor doesn’t get it. The company may have been a supplier, strategic partner, or a channel partner to your competitor and acquiring it may be a great way to disrupt the competitive balance of power.7. Financial engineeringSometimes, an acquisition makes sense for mostly financial reasons, such as tax loss carry-forwards, profits repatriation, or as a financial investment for the company’s venture arm.As you can see, there can be many reasons for M&A activities (mergers and acquisitions) - and you might even come up with a couple more. So, the next time you hear about an acquisition, don’t just analyse the technology stacks before passing your judgment on the strategic fit.Now, let’s get the 2012 M&A season started!

Sunday, January 8, 2012

Another year over, and a new one just begun...yes, I’m quoting John Lennon. This is the time for resolutions and predictions. After I published my 2011 Content Management Predictions a year ago, I was rewarded by a lot of positive feedback and the article became the top post on my blog in 2011. I believe that every prediction has to be followed by a review and so I published my 2011 Predictions Scorecard just a few weeks ago. This year, let’s do it again! Here are my Content Management Predictions for 2012:1. Big Data will be the hype of the yearIf SoLoMo was the buzzword of 2011, I’m predicting that “big data” will be the hype in 2012. Sure, lots of companies are already talking about big data today but in 2012, everybody will be talking about it. There is no good definition of big data today which means that the marketers and pundits will have a field day. Just substitute the word “data” with “big data” and launch your marketing campaign!2. “Social” becomes a featureThe year 2011 saw us shifting gears rapidly from social software to social media and finally to social business. That’s a sure sign that the social market hasn’t settled yet. In 2011, it was still unclear who were the legitimate stakeholders of social enterprise - consumer companies moving in, start-ups capitalizing on the hype, or the traditional enterprise software vendors? Well, I’m predicting that in 2012, it will become clear that social software is not a viable stand-alone business and that we will see it subsumed by enterprise software - from Opentext to SAP to Salesforce, but the big catalyst will be SharePoint 15.3. SharePoint will solve every problem, againSpeaking of, the time has come to make a prediction about SharePoint. 2011 was surprisingly quiet on the SharePoint front with Microsoft focusing on other priorities. In fact, the pundits and wanna-be competitors started poking their heads out and proclaiming rebellious statements about SharePoint. Well, not so fast - the empire will strike again. I predict that SharePoint will make it on the list of Microsoft priorities by the end of 2012 and that just like the previous versions, the Redmond Marketing Machine will turn it into a universal solution for every problem. For a while, we will actually believe it but eventually, things will settle back into the right order. But this time, there may be a new twist in this familiar tune - the cloud!4. Rise of the hybrid cloudIn 2011, it was impossible to have a conversation without mentioning the cloud which is what we started calling it when we could not tell SaaS, PaaS, and IaaS apart anymore. Clouds are hip and all of a sudden, everybody is a meteorologist! Well, I predicted for 2011 that enterprises will not be rushing to the cloud yet. In 2012, that might change. The cloud-based model makes a lot of sense and now, we have a way to say that we may consider selectively taking advantage of certain cloud-based offerings for some use cases: hybrid cloud. In 2012, we will start seeing hybrid cloud adoption of content management software.5. Cloudy outlook for open source Well, all that cloud business has gotta be bad news for open source. Sure, there will always be customers who will like to tinker with their deployments like I wrote about last February. But customers hoping to save money - or at least to reduce their capex - by embracing open source have to seriously consider the cloud-based offerings. Sure, Drupal will be still around and probably still growing but the Great Open Source Movement will hit the trough of disillusionment in 2012 - courtesy of the cloud. 6. Consumerization is here to stayIn my 2011 look back, I admitted that consumerization was one significant trend that I had missed in my predictions. In 2012, consumerization will continue. Particularly the trend of employees bringing their own devices to work will continue. Facing the rapid pace of innovation in consumer devices, companies will not be able to keep up and they will have to give in. People will simply buy the latest gadget and use it for work. OK, since this is too easy of a prediction, I am also predicting that the consequences of consumerization will be the number one topic for the records management and information governance crowd in 2012.7. End of convergenceOne of the consequences of consumerization will be the end of device convergence. Until now, I believed that all of the cool functionality would eventually be subsumed by a single mobile device - most likely sold to us by Apple. But that is not happening. I travel frequently with my laptop, iPad, iPhone, pocket camera, and even a GPS. Oh, and I’ve started wearing an iPod Nano as a watch and I bought a Kindle. That’s not convergence! The reason why I do this is simple - for specific tasks, an optimized device is far better than similar functionality in my smart phone. For example - data roaming fees are the reason for using a GPS while my tiny Canon takes pictures far better than the iPhone and the Kindle is a better reader. For 2012, I predict that we will see even more divergence like this. The device manufacturers have to differentiate and they will be bringing out devices that will be compelling enough to carry multiple ones. Is anybody at RIM reading this? There is a niche opening up for secure, enterprise grade devices, folks...8. HTML5 won’t kill appsTalking about mobility, 2011 marked the beginning of not just the post-PC era but also the post-Flash world. With Flash dead (yes, technically only ‘mobile Flash’ is dead but that really means that Flash is dead) and with Silverlight the likely next victim, all hopes are turning to HTML5 as the panacea for all mobility-related problems. The biggest of the problems being the fact that building native apps is getting costly with the number of mobile OS derivatives growing - particularly in the Android camp. Well, folks, I predict that HTML5 will not solve this issue anytime soon. Certainly not in 2012. In 2012, we will continue seeing native apps being built at a rapid pace. I have elaborated on my reasoning in my recent article. Those enterprise apps I have predicted for 2011 will keep coming in 2012.9. Tipping point for analyticsThere has been plenty of discussion about the need for content analytics in 2011 yet the adoption has been still fairly modest. Sure, the IBM Watson won on Jeopardy and lots of Web sites have added some analytical capabilities to increase their stickiness. But not many organizations use analytics to improve their productivity today - i.e. to help employees deal with the information overflow by applying automatic analytics and classification. I suspect that the price-performance ratio has been the problem so far - it takes way too much computing power to do anything meaningful with acceptable performance. After all, the Watson is a supercomputer! I predict that this will change in 2012. The technology is now good enough to derive significant benefits from analytics and that in 2012, we will start seeing a much broader adoption.10. ECM, what’s next?Lots has been said and written in 2011 about the end of the ECM era. Many vendors tried to distance themselves from Enterprise Content Management by trying to either coin new terms or by embracing broader alternatives. Not very successfully. Like it or not, the term ECM is still the one and only term that has been adopted to describe this space. In 2012, I predict that the search for the ECM replacement will continue and that at the end of 2012, we will be where we are today. Sure, there will be more consolidation and some vendors will be talking about subsuming their ECM acquisitions. There will also be vendors coining new terms like “Secure Social Experience” and “Content as a Service” and “ECM 3.0”. But none of that will stick. In December 2012, we will still call this space ECM. I hope I’m wrong on this one, by the way...Well, here they are, my predictions. Please let me know where you agree and disagree. I sure hope that you disagree with at least some of them. Otherwise, my predictions would be safe and boring. After all, one of my favorite quotes comes from the great Mario Andretti: